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Working and Poor in the USA

By Bill Quigley, Associate Legal Director of the Center for Constitutional Rights and Director of the Law Clinic and the Gillis Long Poverty Law Center at Loyola University New Orleans.

“Our nation, so richly endowed with natural resources and with a capable and industrious population, should be able to devise ways and means of insuring to all our able-bodied men and women, a fair day’s pay for a fair day’s work.” Franklin Delano Roosevelt, 1937

Millions of people in the US work and are still poor. Here are eight points that show why the US needs to dedicate itself to making work pay.

One. How many people work and are still poor?

In 2011, the US Department of Labor reported at least 10 million people worked and were still below the unrealistic official US poverty line, an increase of 1.5 million more than the last time they checked. The US poverty line is $18,530 for a mom and two kids. Since 2007 the numbers of working poor have been increasing. About 7 percent of all workers and 4 percent of all full-time workers earn wages that leave them below the poverty line.

Two. What kinds of jobs do the working poor have?

One third of the working poor, over 3 million people, work in the service industry. Workers in other occupations are also poor: 16 percent of those in farming; 11 percent in construction; and 11 percent in sales.

Three. Which workers are most likely to be working and still poor?

Women workers are more likely to be poor than men. African American and Hispanic workers are about twice as likely to be poor as whites. College graduates have a 2 percent poverty rate while workers without a high school diploma have a poverty rate 10 times higher at 20 percent.

Four. What about benefits for low wage workers?

Ten percent of US workers earn $8.50 an hour or less according to the US Department of Labor. About 12 percent have health care and about 12 percent have retirement benefits. Nearly one in four get paid sick leave and less than half get paid vacation leave.

Five. What rights do the working poor have?

Most workers have a right to earn at least the federal minimum wage of $7.50 an hour. Tipped employees are supposed to get at least $2.13 each hour from their employer and if the worker does not earn enough in tips to make the $7.50 minimum wage, the employer must make up the difference. People who work more than 40 hours in a workweek are entitled to one and one-half of their regular pay for each hour of overtime.

Six. What about wage theft from the working poor?

Many low wage workers have part of their earnings stolen by their employers. Examples include not paying people the full minimum wage, not paying required overtime, stealing from tipped employees, or fraudulently classifying workers as independent contractors. A survey of over 4000 low wage workers in Chicago, Los Angeles and New York conducted by university and non-profit researchers found: 26 percent of the workers were paid less than the minimum wage in the previous week, a majority were underpaid by more than $1 an hour; a significant number worked overtime the previous week and were not paid the legally required overtime; many were required to come early or stay late and work “off the clock” and were not paid for it; almost a third of the tipped workers were not paid the minimum wage and more than 1 in 10 tipped workers had some of their money stolen by their employer or supervisor.

Seven. What is a living wage in the US?

Dr. Amy Glasmeier of Penn State University has created a Living Wage Calculator that estimates the hourly wage needed to pay the cost of living for low wage families in the US. It breaks down the cost of living by state and locality across the nation. In New Orleans, a mom with one child needs to earn $17.52 to make ends meet. In New York, the mom with one child should earn $19.66 to make it. If we now realistically calculate the number of people who work and do not earn a living wage, the numbers of working poor in the US skyrocket to several tens of millions.

Eight. What about jobs for the unemployed and underemployed?

The US Labor Department estimated recently that 13 million people were unemployed. Another 8 million people were working part-time but wanted full-time work. Even more millions who are not working are not counted in those numbers because they have been unemployed so long.

A study by Northeastern University found that in the poorest families, unemployment is nearly 31 percent. Underemployment is also much more of a problem in poor homes, with over 20 percent of those workers reporting they are working part-time but seeking full-time work.

Our nation can do so much more. We say our country values work. It is time to do something about it.

If the US truly values work, we need to support the millions of our sisters and brothers who are low wage workers. Steps needed include: raising the minimum wage to a living wage; protecting workers from getting ripped off; making it easier for workers to organize together if they choose to; and creating jobs, public jobs if necessary, so that everyone who wants to work can do so. Many are already working on these justice issues.